Poker's Black Friday

Over the past eight years, there has been a tremendous growth in popularity of poker as a form of “sports entertainment.” While the game itself is not a sport, it’s coverage on television and across the web has created a deep connection between poker and the sports world. However, as of Friday, the relationship between the sports world and poker took a dramatic turn.

For those that aren’t familiar with what happened, I’ll try to summarize quickly. The FBI and Southern District of New York announced that they were arresting the top executives from the big-three online poker sites (PokerStars, Full Tilt Poker and Absolute Poker/UltimateBet) and they seized the related “.com” domain names. Those arrested are facing charges of bank fraud, money laundering, and violation of UIGEA (Unlawful Internet Gambling Enforcement Act).

Ever since the UIGEA was passed in 2006, there has been a question as to the legality of online poker in the U.S. The language of the bill focused on financial transactions related to online gambling, but the big service providers mentioned above believed that poker is a game of skill, not gambling, and continued to operate very successfully in the U.S. In fact, the poker industry continued to boom over the past 4-5 years, as you can see from the amount of media coverage it received and the sponsorships involved. Both Full Tilt Poker and PokerStars sponsored poker television coverage on ESPN (World Series of Poker and the North American Poker Tour), NBC (NBC Heads-Up and Poker After Dark) and Fox (PokerStars The Big Game). ESPN.com also had PokerStars sponsored coverage through a web-video show called the Inside Deal. PokerStars was even an NHL sponsor, with prominent exposure at their annual awards show.

Poker also created lots of new “sports” celebrities, people like Phil Ivey, Daniel Negreanu, Chris “Jesus” Ferguson, Phil Hellmuth and many more. Not only were these top players sponsored by online poker sites, they were popular enough to receive endorsements outside of poker. In looking at the “sport,” there were definitely similarity to NASCAR in terms of individual endorsement potential. You could often see these players wearing logos of their partner companies, and the better they performed at the table, the greater the partner exposure.

In the immediate aftermath of “Black Friday,” the following events have occurred:

ESPN and ESPN.com have removed all associated with PokerStars, canceled their North American Poker Tour coverage and even stopped showing reruns of older WSOP broadcasts.

The Big Game on Fox has been canceled, at least temporarily

Wynn Entertainment and other U.S.-based casinos have ended most of their relationships with online sites

All three sites have stopped serving U.S. players for real money games

Top officials that have yet to be arrested could be extradited, depending on their current location (officials for these sites usually live outside the country)

Funds for U.S. players are temporarily frozen, and there’s a chance this money could be lost altogether.

The big question is, what happens now? The World Series of Poker, which has become a top sports-related brand will probably see a significant drop in participation and television coverage. Top players that rely on online poker for their income may be forced to leave the country, or even worse, could be looking at criminal charges depending on their relationship with the online sites. Poker television as we know it could be over, along with any poker-related sponsorships of U.S. teams or leagues. Meanwhile, the Poker Players Alliance, a lobbying group on behalf of poker players, is trying to rally players to push for legislation to legalise and regulate online poker. Bills on this topic have been discussed in Congress on and off for the past two years, and some people even feel that these recent events could speed up the process of U.S. regulation.

It’s too early to predict what the ultimate results from these charges will be, but there’s little doubt that the landscape of the poker industry has been permanently changed by “Black Friday.” For more coverage of this story, check out Darren Rovell’s coverage or visit www.pokernews.com.